09 May 2011

Grand Bargains

The Washington Post | Ezra Klein | Some deficit real talk: "The wish for a grand bargain that’ll take care of the deficit all at once is probably just that: a wish. The likelier outcome is a slew of deficit-reduction measures passed over the next decade or so. That’s even truer for health-care spending, which is both the biggest fiscal problem we face and the one that most requires a decades-long process of trial-and-error in which we test out new ways of delivering care, of paying for care, of separating useful treatments from useless ones and of modernizing the sector’s IT infrastructure."

Klein is probably right that a grand bargain is unlikely to impossible.

But it's funny that Klein should bring up health care, because my concern with the incremental approach to budget balancing is the same reason many ObamaCare advocates gave for why we needed to jump in feet first and pass one great big whopper of an HCR bill rather than trying out some components first, and reforming the entitlements we already have, and testing and revisiting the matter in a couple of years when we know what the regulations will actually be and how they work.

Their concern was once there was some law which people could label "Health Care Reform" many of the fence-sitters would lose their appetite for reform and not be willing to come back to finish the job. I have the same concern with budget balancing: once there is something out there called "deficit reduction" the wind spills out of the sails.

I think the problem is actually worse for deficits than HCR though, because at least HCR was a mix of dessert and vegetables. Deficit reduction is all brussel sprouts. True, many people desperately want us to eat our sprouts, but if few congressmen were looking forward to the opportunity to return to their constituents session after session to announce a new serving of dessert-plus-veg, how many of them will be excited about announcing nothing but vegetables year after year?

That's why I think a "grand bargain" is unlikely, but it's still something we ought to push towards. We won't be able to tackle this in one go, but we should try and keep it down to as few large bites as we can.

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In concrete terms, this leads me to some mixd feelings about these debt ceiling negotiations. Part of me would want to use this as an opportunity to push for an agreement which, while not a grand bargain, would at least be the first big bite of the solution. Another part of me thinks the whole notion of a debt ceiling that keeps getting kicked down the road is a farce, and should be abolished all together. (Why give congress the power to fool people into thinking its hands are tied when they can — and do! — untie the knots at will?) On the third hand, playing hardball by linking extending the ceiling to a broader negotiation seems pretty transparently like a bluff to me, so maybe I lean towards just nixing the whole thing.

In any event this sort of political horse race maneuvering really isn't my thing, so ... forget it. Back to work for me.

1 comment:

On the subject of the debt ceiling, I think it is actually somewhat helpful. The very act of needing to raise the debt ceiling is an announcement to the world that, once again, feckless Uncle Sam has maxed out his card. Lacking a debt ceiling would be more honest, but less transparent, if that makes any sense (since the debt could and would pile up with fewer observers).